FY2025 takeaways: earnings up, dividend higher, platform steadier
Social Housing REIT (SOHO) has posted a solid first full year under Atrato’s management. Adjusted earnings per share rose 20.9% to 6.53p (2024: 5.40p) and dividend cover improved to 1.17x from 0.99x. The Board lifted the annual dividend target by 3%, declaring 5.622p per share for FY2025, backed by higher rent collection and lower costs.
It is not all sunshine: property valuations softened again and Net Tangible Assets (NTA) per share slipped to 94.23p (2024: 99.05p). But operationally the trend is better – and that matters for income investors.
Key numbers investors should know
| Measure | FY2025 | FY2024 |
|---|---|---|
| Adjusted EPS | 6.53p | 5.40p |
| Dividends (declared) | 5.62p | 5.46p |
| Adjusted dividend cover | 1.17x | 0.99x |
| Net rental income | £40.03 million | £35.85 million |
| Rent collection | 91.5% | 87.6% |
| EPRA cost ratio | 18.7% | 29.9% |
| EPRA NIY | 6.82% | 6.44% |
| NTA per share | 94.23p | 99.05p |
| Portfolio value | £606.3 million | £626.4 million |
| Net LTV | 39.5% | 37.7% |
| Debt (fixed, avg rate) | £263.5m at 2.74% | £263.5m at 2.74% |
| Debt maturity (WAM) | 7.6 years | 8.6 years |
Earnings and dividends: what changed and why
Two drivers did the heavy lifting: stronger rent intake and lower running costs. Net rental income rose 11.7% to £40.03 million on the back of inflation-linked uplifts and better cash collection outcomes. The EPRA cost ratio dropped to 18.7% (from 29.9%), helped by shifting the management fee to a market capitalisation basis and a wider cost programme.
With adjusted EPS at 6.53p and dividends at 5.62p, SOHO’s payout is now sensibly covered. That is a meaningful step for income dependability after a tough period in the sector.
Rent collection rebuild and counterparty fixes
Rent collection improved to 91.5% (from 87.6%). The lag relates mainly to two “legacy” counterparties and pass-through arrangements, where SOHO only receives net rents after certain costs.
- Parasol to Portus (formerly Westmoreland/BeST): 20 of the assigned properties have already reverted to long-term FRI terms (fully repairing and insuring – the tenant covers repairs and maintenance) at 75-85% of the prior rent. The rest are expected to follow in 2026.
- My Space: performing properties are being assigned to Inclusion and will move to long-term FRI leases after stabilisation; unsuitable or vacant assets are being sold, with residents rehoused first where needed. Auction sales to date have been at or around book value.
Across the rest of the book SOHO reports 100% rent collection, which underlines that the issues are ring-fenced and being actively resolved.
Valuation and NAV: yields out, values down
As seen across listed real estate, yields moved out. The portfolio’s Net Initial Yield rose to 6.42% (EPRA NIY 6.82%), and the investment property valuation eased 3.2% to £606.3 million. That pushed NTA per share down 4.9p to 94.23p.
It is important to separate operating cashflows – which improved – from book values – which remain sensitive to market yields and the speed of counterparty stabilisation. If SOHO completes the Portus and My Space workstreams as planned, that should be supportive for values and cash collection.
Debt profile: long, cheap and fully fixed
SOHO’s debt remains a standout strength: £263.5 million is fixed at a weighted average 2.74% with no near-term refinancing and the first maturity in mid-2028. Weighted average debt term is 7.6 years and Fitch reaffirmed the ‘A-’ investment grade rating in 2025. Net LTV is 39.5% (EPRA LTV 39.08%), within the company’s c.40% medium-term target.
In plain English: the interest bill is predictable and low versus today’s market rates, and there’s no refinancing cliff around the corner.
Inflation linkage and occupancy: tailwinds into 2026
Every lease is inflation-linked (mainly to CPI), with 86% uncapped. Average rent uplift on reviews completed in 2025 was 2.2%. The key reference point for 2026 is September 2025 CPI at 3.8%, which should support stronger like-for-like rental growth on the majority of reviews in April 2026.
Resident occupancy sat at a robust 87% (excluding assets being sold). The portfolio consists of 492 properties and 389 leases generating £43.7 million of annualised contracted rent.
Costs, sustainability and asset quality
The step-down in the EPRA cost ratio to 18.7% is material and leaves more of each pound of rent as profit. On the environmental side, EPC “C or better” compliance improved from 71% to 77%, with a programme underway to reach 100% by 2028, ahead of the anticipated 2030 deadline. That should help protect values and keep utility bills sensible for residents.
What looks positive for shareholders
- Dividends now covered: 1.17x adjusted cover and a 3% uplift to 5.622p.
- Better collections: 91.5% overall and 100% outside the two problem areas.
- Lower costs: EPRA cost ratio down to 18.7% from 29.9%.
- Debt locked in: 2.74% fixed, no refi until 2028, Fitch ‘A-’ reaffirmed.
- Inflation linkage: 100% indexed leases, with a 3.8% CPI reference for April 2026 reviews.
What to keep an eye on (the bear points)
- NAV pressure: Portfolio NIY moved out to 6.42%, cutting NTA to 94.23p.
- Rent collection still sub-100%: Pass-through leases with Portus and My Space are the drag – completion of assignments and stabilisation in 2026 is key.
- Concentration: Exposure to the largest Approved Provider is 33.4% (2024: 30.9%). Within policy, but bears watching.
- EPRA vacancy rate: up to 1.54% (from 0.32%) as the portfolio is optimised and non-core assets are exited.
Jargon buster (quick and useful)
- FRI lease: Fully repairing and insuring – the tenant covers repairs, maintenance and insurance.
- WAULT: Weighted Average Unexpired Lease Term; SOHO cites 22.4 years to expiry across the book.
- EPRA measures: Industry-standard metrics to compare listed property companies.
- NIY: Net Initial Yield – the yield on current rent against the property value including purchaser’s costs.
- Pass-through: SOHO receives net rent collected by the provider after agreed costs, rather than full contracted rent.
Outlook and my take
Atrato’s first year has delivered what investors wanted: higher earnings, lower costs, better collections and clearer oversight of counterparties. The dividend is covered again and set to benefit from April’s CPI-linked rent reviews. The valuation drag is the trade-off, but that is sector-wide and should stabilise if gilt yields behave and the remaining assignments land as planned.
For income-focused investors, SOHO now looks more dependable than a year ago, thanks to its low-cost, long-dated, fixed debt and index-linked leases. Near-term share price catalysts hinge on completing the Portus and My Space workstreams, continued rent recovery, and any narrowing of the discount to NTA.
Net-net, I see a constructive setup for 2026: growing inflation-linked cashflows, improving counterparties, and a disciplined cost base supporting a progressive dividend. The risks are not gone – but they are better contained.
